How Pak could overcome its economic crisis

How Pak could overcome its economic crisis

With its economy battered by the devastating floods, Pakistan must make peace with India and normalise its economic ties if it wants to overcome the crisis, a noted American scholar has said.

"Pakistan's economic expansion has come, in part, by selling and smuggling consumer goods to India's growing middle classes," Steve Coll, president of the Washington-based think-tank New America Foundation, wrote in the latest issue of the New Yorker.

"For Pakistan to overcome its many burdens, it must make peace or at least normalise economic ties with India, which would include resolving the Kashmir issue," he said, adding that on this subject, the United States could benefit from a sense of urgency comparable to its focus on Pakistani terrorism.

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Image: A man wades through flood waters towards a naval boat while evacuating his children in Sukkur, located in Pakistan's Sindh province.Photographs: Reuters

How Pak could overcome its economic crisis

"In 2007, the governments of India and Pakistan negotiated the outline of an agreement that would have further opened their border to trade. A final deal has proved elusive, in part because of evidence that Pakistan's Army continues to support anti-Indian terrorist groups; the Obama administration has the leverage in Pakistan to hold the Army accountable," he argued.

Noting that the country's economy was on the right track in the last one decade, Coll said the number of Pakistanis living in poverty fell by almost half between 1999 and 2008, from thirty per cent of the population to about 17 per cent.

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Image: Pakistani flood victims stand in a queue to get food handouts at a relief camp.Photographs: Reuters

How Pak could overcome its economic crisis

"This extraordinary change, a result of rapid economic growth and remittances from Pakistanis working abroad, is not often discussed on American cable-news outlets," he said.

"Five years ago, Pakistan's economic growth rate reached eight per cent annually, and the economy has continued to expand, if more slowly, even since 2008, when the global financial crisis and the domestic Taliban insurgency took hold simultaneously," he wrote.

Image: Flood victims show their ID cards to receive food rations at a distribution centre.Photographs: Reuters